Most people negotiate hard over the purchase price and then never look at what the car costs to keep. That is the wrong way round. Over five years, the running costs of two similar cars can differ by more than the gap in their sticker prices.
Here is what the money actually goes on, roughly in order of size.
Depreciation is the biggest cost, and it is invisible
Depreciation does not appear on any bill, which is exactly why it gets ignored. It is almost always the largest single cost of owning a new car.
A typical new car loses a substantial share of its value in the first three years, with the steepest drop in year one. The car that costs $45,000 today and $22,000 in five years has cost you $23,000 in depreciation — far more than you will spend on fuel over the same period.
This is why resale value deserves more attention than it usually gets. Two cars with identical purchase prices and identical fuel consumption can differ by many thousands over five years purely on how well they hold value.
Our depreciation calculator and resale value calculator will give you a starting estimate for a specific car.
Fuel or charging
The second-largest cost for most drivers, and the one where the choice of powertrain matters most.
Fuel cost scales with three things: how far you drive, what the car consumes, and what you pay per litre or kilowatt-hour. The first is largely fixed by your life. The second is set when you choose the car.
The gap is significant. Across the 64 cars in our database the spread in consumption is wide enough that two otherwise comparable vehicles can differ by well over $1,000 a year for the same distance driven.
Electric cars change the arithmetic rather than simply reducing it. Charging at home on an off-peak rate is dramatically cheaper than petrol. Charging exclusively on public fast chargers is not — it can approach petrol costs. If you cannot charge at home, run the numbers carefully before assuming an EV will save you money. Our EV savings calculator compares the two properly.
Insurance
Comprehensive insurance is a large annual cost and varies enormously — by car, by driver age, by postcode and by claims history.
The car itself matters more than people expect. Performance variants, cars with expensive panels or sensors, and models with high theft rates all cost more to insure. It is worth getting a quote on your shortlist before you buy rather than after.
Two practical notes: EVs have sometimes carried higher premiums because of battery replacement costs and a smaller repairer network, and raising your excess reduces the premium but only helps if you could actually pay it.
Servicing and maintenance
Most manufacturers now publish capped-price servicing for a set number of years, which makes this one of the easier costs to compare before you buy. Check the schedule, not just the headline price — a cheap service every six months can total more than a dearer one every twelve.
Electric cars genuinely win here. No oil changes, no spark plugs, no timing belts, no exhaust system, and far less brake wear thanks to regenerative braking. Servicing costs are typically a fraction of an equivalent petrol car.
Tyres are the cost people forget. They are consumable, they are not covered by capped-price servicing, and heavier cars — EVs included — eat them faster.
Registration and CTP
Set by your state, and largely outside your control. It varies meaningfully between jurisdictions, and in some states is affected by engine size or vehicle weight.
This is an annual cost you cannot negotiate, so simply budget for it accurately rather than trying to optimise it.
Stamp duty — a one-off, but a large one
Not a running cost, but worth including because it is the cost most often left out of the purchase budget entirely. On a $45,000 car it ranges from about $1,278 to $2,587.50 depending on your state.
We have written up what every state charges, and you can calculate yours in the stamp duty calculator.
Putting it together
A reasonable way to think about it: take the purchase price, estimate what the car will be worth when you plan to sell, and add your annual costs across the years you will own it. That total — not the sticker price — is what the car actually costs.
The running costs calculator does this for a specific car, and the affordability calculator works backwards from your income to a sensible budget.
What you can actually control
Four things, in rough order of leverage:
- Which car you choose. Depreciation, fuel consumption, insurance group and service costs are all decided the day you sign.
- How you fuel it. Home charging versus public fast charging is a genuinely large difference for EV owners.
- How long you keep it. The steepest depreciation is early. Keeping a car past the first few years dramatically reduces its annual cost.
- Insurance shopping. The same car and driver can attract materially different premiums across insurers.
Everything else — registration, CTP, the price of fuel — is broadly fixed.
The practical advice
Before you commit to a car, get three numbers: the estimated five-year depreciation, an actual insurance quote, and the published service schedule cost. Those three will tell you more about whether it is a good financial decision than any amount of haggling over the purchase price.
Browse by body type, fuel type or budget to compare, or let the AI advisor narrow it down against how you actually drive.
The Final Word
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